Exhibit 4.3
FACTORY 2-U STORES, INC.
1997 STOCK OPTION PLAN
THE AMENDED AND RESTATED
FACTORY 2-U STORES, INC.
1997 STOCK OPTION PLAN
1. PURPOSE.
This Amended and Restated Factory 2-U Stores, Inc. 1997 Stock Option Plan
(the "Plan") is intended to provide incentives which will attract, retain and
motivate highly competent persons as key employees of Factory 2-U Stores, Inc.
(the "Company") and of any subsidiary now existing or hereafter formed or
acquired, by providing them opportunities to acquire shares of the common stock,
par value $0.01 per share, of the Company ("Common Stock"). Furthermore, the
Plan is intended to assist in aligning the interests of the Company's key
employees with those of its stockholders.
2. ADMINISTRATION.
(a) The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") from
among its members. The Committee shall be comprised of not less than two
members. Each member of the Committee shall at all times be (i) a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3) (or any
successor rule) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and (ii) an "outside director" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations promulgated thereunder. Subject to the
provisions of the Plan, the Committee is authorized to establish such
rules and regulations as it deems necessary for the proper administration
of the Plan and to make such determinations and interpretations and to
take such action in connection with the Plan and any Stock Options (as
described in Section 5 below) granted hereunder as it deems necessary or
advisable. All determinations and interpretations made by the Committee
shall be binding and conclusive on all participants and their legal
representatives. No member of the Board, no member of the Committee and no
employee of the Company shall be liable for any act or failure to act
hereunder, except in circumstances involving his or her bad faith, gross
negligence or willful misconduct, or for any act or failure to act
hereunder by any other member or employee or by any agent to whom duties
in connection with the administration of this Plan have been delegated.
The Company shall indemnify members of the Committee and any agent of the
Committee who is an employee of the Company, against any and all
liabilities or expenses to which they may be subjected by reason of any
act or failure to act with respect to their duties on behalf of the Plan,
except in circumstances involving such person's bad faith, gross
negligence or willful misconduct.
(b) The Committee may delegate to one or more of its members, or to
one or more agents, such administrative duties as it may deem advisable,
and the Committee, or any person to whom it has delegated duties as
aforesaid, may employ one or more persons to render advice with respect to
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any responsibility the Committee or such person may have under the Plan.
The Committee may employ such legal or other counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion or computation received from any such counsel,
consultant or agent. Expenses incurred by the Committee in the engagement
of such counsel, consultant or agent shall be paid by the Company, or the
subsidiary or affiliate whose employees have benefitted from the Plan, as
determined by the Committee.
3. PARTICIPANTS.
Participants shall consist of such key employees, directors, consultants
and suppliers of the Company and any of its subsidiaries, as the Committee in
its sole discretion determines to be significantly responsible for the success
and future growth and profitability of the Company and whom the Committee may
designate from time to time to receive Stock Options under the Plan. Designation
of a participant in any year shall not require the Committee to designate such
person to receive a Stock Option in any other year or, once designated, to
receive the same type or amount of Stock Option as granted to the participant in
any other year. The Committee shall consider such factors as it deems pertinent
in selecting participants and in determining the type and amount of their
respective Stock Options.
4. COMMON STOCK AVAILABLE UNDER THE PLAN.
The aggregate number of shares of Common Stock that may be subject to
Stock Options granted under this Plan shall be 2,157,980 shares of Common Stock,
which may be authorized and unissued or treasury shares, subject to any
adjustments made in accordance with Section 6 hereof. The maximum number of
shares of Common Stock with respect to which Stock Options may be granted to any
individual participant under the Plan during the term of the Plan shall not
exceed 361,596 shares, subject to any adjustments made in accordance with
Section 6 hereof. Any shares of Common Stock subject to a Stock Option which for
any reason is cancelled, terminated without having been exercised, forfeited, or
delivered to the Company as pan of full payment for the exercise of a Stock
Option shall again be available for Stock Options under the Plan. The preceding
sentence shall apply only for purposes of determining the aggregate number of
shares of Common Stock subject to Stock Options and shall not apply for purposes
of determining the maximum number of shares of Common Stock subject to Stock
Options that any individual participant may receive.
5. STOCK OPTIONS.
(a) IN GENERAL. The Committee is authorized to grant Stock Options
to key employees, directors, consultants and suppliers of the Company and
any of its subsidiaries, and shall, in its sole discretion, determine the
key employees, directors, consultants and suppliers who will receive Stock
Options and the number of shares of Common Stock underlying each Stock
Option. Stock Options may be (i) "incentive stock options" ("Incentive
Stock Options"), within the meaning of Section 422 of the Code, or (ii)
Stock Options which do not constitute Incentive Stock Options
("Nonqualified Stock Options"). The Committee shall have the authority to
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grant to any key employee one or more Incentive Stock Options,
Nonqualified Stock Options, or both types of Stock Options, and to grant
to any other participant one or more Nonqualified Stock Options. Each
Stock Option shall be subject to such terms and conditions consistent with
the Plan as the Committee may impose from time to time. In addition, each
Stock Option shall be subject to the following limitations set forth in
this Section 5.
(b) STOCK OPTION AGREEMENTS. Stock Options shall be evidenced by
agreements (which need not be identical) in such forms as the Committee
may from time to time approve; PROVIDED, HOWEVER, that in the event of any
conflict between the provisions of the Plan and any such agreements, the
provisions of the Plan shall prevail.
(c) EXERCISE PRICE. Subject to the provisions of Section 5(f)
hereof, each Stock Option granted hereunder shall have such exercise price
as the Committee may determine at the date of grant; PROVIDED, HOWEVER,
that the exercise price of any Incentive Stock Option shall not be less
than 100 percent of the Fair Market Value (as defined in Section 9 below)
of the Common Stock on the date such Incentive Stock Option is granted.
(d) PAYMENT OF EXERCISE PRICE. The Stock Option exercise price may
be paid in cash or, in the discretion of the Committee, by the delivery of
shares of Common Stock then owned by the participant, by the withholding
of shares of Common Stock for which a Stock Option is exercisable, or by a
combination of these methods. In the discretion of the Committee, payment
may also be made by delivering a properly executed exercise notice to the
Company together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay
the exercise price. To facilitate the foregoing, the Company may enter
into agreements for coordinated procedures with one or more brokerage
firms. The Committee may prescribe any other method of paying the exercise
price that it determines to be consistent with applicable law and the
purpose of the Plan, including, without limitation, in lieu of the
exercise of a Stock Option by delivery of shares of Common Stock then
owned by a participant, providing the Company with a notarized statement
attesting to the number of shares owned, where upon verification by the
Company, the Company would issue to the participant only the number of
incremental shares to which the participant is entitled upon exercise of
the Stock Option. In determining which methods a participant may utilize
to pay the exercise price, the Committee may consider such factors as it
determines are appropriate; PROVIDED, HOWEVER, that with respect to
Incentive Stock Options, all such discretionary determinations by the
Committee shall be made at the time of grant and specified in the Stock
Option agreement.
(e) EXERCISE PERIOD. Stock Options granted under the Plan shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee; PROVIDED, HOWEVER, that no Stock
Option shall be exercisable later than 10 years after the date it is
granted. All Stock Options shall terminate at such earlier times and upon
such conditions or circumstances as the Committee shall in its discretion
set forth in such Stock Option agreement at the date of grant.
(f) LIMITATIONS ON INCENTIVE STOCK OPTIONS. Incentive Stock Options
may be granted only to participants who are key employees of the Company
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or any of its subsidiaries at the date of grant. The aggregate market
value (determined as of the time the Stock Option is granted) of the
Common Stock with respect to which Incentive Stock Options (under all
option plans of the Company) are exercisable for the first time by a
participant during any calendar year shall not exceed $100,000. For
purposes of the preceding sentence, (i) Incentive Stock Options shall be
taken into account in the order in which they are granted and (ii)
Incentive Stock Options granted before 1987 shall not be taken into
account. Incentive Stock Options may not be granted to any participant
who, at the time of grant, owns stock possessing (after the application of
the attribution rules of Section 424(d) of the Code) more than 10 percent
of the total combined voting power of all outstanding classes of stock of
the Company or any of its subsidiaries, unless the option price is fixed
at not less than 110 percent of the Fair Market Value of the Common Stock
on the date of grant and the exercise of such option is prohibited by its
terms after the expiration of 5 years from the date of grant of such
option. In addition, no Incentive Stock Option shall be issued to a
participant in tandem with a Nonqualified Stock Option.
6. ADJUSTMENT PROVISIONS.
If there shall be any change in the Common Stock, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
reverse stock split, split up, spinoff, combination of shares, exchange of
shares, dividend in kind or other like change in capital structure or
distribution (other than normal cash dividends) to stockholders of the Company,
an adjustment shall be made to each outstanding Stock Option such that each such
Stock Option shall thereafter be exercisable for such securities, cash and/or
other property as would have been received in respect of the Common Stock
subject to such Stock Option had such Stock Option been exercised in full
immediately prior to such change or distribution, and such an adjustment shall
be made successively each time any such change shall occur. In addition, in the
event of any such change or distribution, in order to prevent dilution or
enlargement of participants' rights under the Plan, the Committee shall have
authority to adjust, in an equitable manner, the number and kind of shares that
may be issued under the Plan, the number and kind of shares subject to
outstanding Stock Options, the exercise price applicable to outstanding Stock
Options, and the Fair Market Value of the Common Stock and other value
determinations applicable to outstanding Stock Options. Appropriate adjustments
may also be made by the Committee in the terms of any Stock Options under the
Plan to reflect such changes or distributions and to modify any other terms of
outstanding Stock Options on an equitable basis, including modifications of
performance targets and changes in the length of performance periods.
Notwithstanding the foregoing, (i) any adjustment with respect to an Incentive
Stock Option shall comply with the rules of Section 424(a) of the Code, and (ii)
in no event shall any adjustment be made which would render any Incentive Stock
Option granted hereunder other than an incentive stock option for purposes of
Section 422 of the Code.
7. CHANGE IN CONTROL.
(a) Notwithstanding any other provision of this Plan, if there is a
Change in Control of the Company, all then outstanding Stock Options shall
immediately become exercisable. For purposes of this Section 7, a "Change
in Control" of the Company shall be deemed to have occurred upon any of
the following events:
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(i) any person or group within the meaning of Section 13(d)(3)
of the Exchange Act (other than the persons who do so on the Effective
Date) shall beneficially own (within the meaning of Rule 13d-3 under
the Exchange Act) more than 50% of the total voting power of all
classes of capital stock of the Company entitled to vote generally in
the election of directors of the Company;
(ii) the Company consolidates with, merges into, or sells,
leases or conveys all or substantially all of its assets to, any
other person; or
(iii) the Company enters into or approves any agreement,
transaction or proposal that would result in the occurrence of any
event described in clauses (i) or (ii) (including without limitation
any agreement, transaction or proposal that would have such result with
the passage of time, upon the payment of money or other consideration,
or upon the occurrence of any contingency or contingencies).
(b) The Committee, in its discretion, may determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option
outstanding hereunder shall terminate within a specified number of days
after notice to the holder, and such holder shall receive, with respect to
each share of Common Stock subject to such Stock Option, an amount equal
to the excess of the Fair Market Value of such shares of Common Stock
immediately prior to the occurrence of such Change in Control over the
exercise price per share of such Stock Option; such amount shall be
payable in cash, in one or more kinds of property (including the property,
if any, payable in the transaction) or in a combination thereof, as the
Committee, in its discretion, shall determine.
8. TRANSFERABILITY.
Each Stock Option granted under the Plan to a participant shall be
exercisable, during the participant's lifetime, only by the participant and no
such Stock Option shall be transferable otherwise than by will or the laws of
descent and distribution. In the event of the death of a participant, each Stock
Option theretofore granted to him or her shall be exercisable during such period
after his or her death as the Committee shall in its discretion set forth in
such option or right at the date of grant and then only by the executor or
administrator of the estate of the deceased participant or the person or persons
to whom the deceased participant's rights under the Stock Option shall pass by
will or the laws of descent and distribution.
9. FAIR MARKET VALUE.
For purposes of this Plan and any Stock Option granted hereunder, Fair
Market Value shall be (i) the closing price of the Common Stock on the date of
calculation (or on the last preceding trading date if Common Stock was not
traded on such date) if the Common Stock is readily tradeable on a national
securities exchange or other market system or (ii) if the Common Stock is not
readily tradeable, the amount determined in good faith by the Committee as the
fair market value of the Common Stock.
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10. WITHHOLDING.
All payments or distributions made pursuant to the Plan shall be net of
any amounts required to be withheld pursuant to applicable federal, state and
local tax withholding requirements. If the Company proposes or is required to
distribute Common Stock pursuant to the Plan, it may require the recipient to
remit to it or to the corporation that employs such recipient an amount
sufficient to satisfy such tax withholding requirements prior to the delivery of
any certificates for such Common Stock. In lieu thereof, the Company or the
employing corporation shall have the right to withhold the amount of such taxes
from any other sums due or to become due from such corporation to the recipient
as the Committee shall prescribe. The Committee may, in its discretion and
subject to such rules as it may adopt (including any as may be required to
satisfy applicable tax and/or non-tax regulatory requirements), permit a
participant to pay all or a portion of the federal, state and local withholding
taxes arising in connection with any Stock Option consisting of shares of Common
Stock by electing to have the Company withhold shares of Common Stock having a
Fair Market Value equal to the amount of tax to be withheld, such tax calculated
at rates required by statute or regulation.
11. TENURE.
A participant's right, if any, to continue to serve the Company as a
director, officer, employee, or otherwise, shall not be enlarged or otherwise
affected by his or her designation as a participant under the Plan.
12. UNFUNDED PLAN.
Participants shall have no right, title, or interest whatsoever in or to
any investments which the Company may make to aid it in meeting its obligations
under the Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any participant, beneficiary,
legal representative or any other person. To the extent that any person acquires
a right to receive payments from the Company under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan. The Plan is not intended to be subject to the Employee
Retirement Income Security Act of 1974, as amended.
13. NO FRACTIONAL SHARES.
No fractional shares of Common Stock shall be issued or delivered pursuant
to the Plan. The Committee shall determine whether cash or other property shall
be issued or paid in lieu of fractional shares or whether such fractional shares
or any rights thereto shall be forfeited or otherwise eliminated.
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14. DURATION, AMENDMENT AND TERMINATION.
No Stock Option shall be granted more than 10 years after the Effective
Date (as defined below). The Board may amend the Plan from time to time or
suspend or terminate the Plan at any time; PROVIDED, HOWEVER, that no action
authorized by this Section 14 shall reduce the amount of any existing Stock
Option or change the terms and conditions thereof without the participant's
consent. No amendment of the Plan shall, without approval of the stockholders of
the Company, (i) increase the total number of shares which may be issued under
the Plan, (ii) increase the maximum number of shares underlying all Stock
Options that may be granted to any individual during the term of the Plan, (iii)
modify the requirements as to eligibility for Stock Options grants under the
Plan, or (iv) disqualify any Incentive Stock Options granted hereunder.
15. GOVERNING LAW.
This Plan, Stock Options granted hereunder and actions taken in connection
herewith shall be governed and construed in accordance with the laws of the
State of Delaware (regardless of the law that might otherwise govern under
applicable Delaware principles of conflict of laws).
16. EFFECTIVE DATE.
(a) The Plan shall be effective as of the date on which the Plan,
having been theretofore adopted by the Committee, shall be ratified by the
Board (the "Effective Date"); PROVIDED, HOWEVER, that the Plan shall
thereafter be approved by the stockholders of the Company at an annual
meeting or any special meeting of stockholders of the Company within 12
months after the Effective Date, and such approval of stockholders shall
be a condition to the right of each participant to receive Stock Options
hereunder. Any Stock Option granted under the Plan prior to such approval
of stockholders shall be effective as of the date of grant (unless, with
respect to any Stock Option, the Committee specifies otherwise at the time
of grant), but no such Stock Option may be exercised or settled and no
restrictions relating to any Stock Option may lapse prior to such
stockholder approval, and if stockholders fail to approve the Plan as
specified hereunder, any such Stock Option shall be cancelled.
(b) This Plan shall terminate on the tenth anniversary of the
Effective Date (unless sooner terminated by the Board).
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AMENDMENT TO
AMENDED AND RESTATED FAMILY BARGAIN CORPORATION
1997 STOCK OPTION PLAN
WHEREAS the Board of Directors of Factory 2-U Stores, Inc., formerly
Family Bargain Corporation (the "Company"), has determined that it would be in
the best interest of the Company to amend the Amended and Restated 1997 Stock
Option Plan of the Company (the "Plan");
NOW, THEREFORE, effective as of the date hereof, the Plan is amended
as follows:
1. The name of the Plan is hereby amended to be "Factory 2-U
Stores, Inc. 1997 Stock Option Plan."
2. Section 1 of the Plan is hereby amended to change all references
to "Family Bargain Corporation" to "Factory 2-U Stores, Inc."
3. Section 4 of the Plan is hereby amended to read in its
entirety as follows:
"4. Common Stock Available Under the Plan.
The aggregate number of shares of Common Stock that may
be subject to Stock Options granted under this Plan shall be
2,157,980 shares of Common Stock, which may be authorized and
unissued or treasury shares, subject to any adjustments made
in accordance with Section 6 hereof. The maximum number of
shares of Common Stock with respect to which Stock Options may
be granted to any individual participant under the Plan during
the term of the Plan shall not exceed 361,596 shares, subject
to any adjustments made in accordance with Section 6 hereof.
Any shares of Common Stock subject to a Stock Option which for
any reason is canceled, terminated without having been
exercised, forfeited or delivered to the Company as part of
full payment for the exercise of any Stock Option shall again
be available for Stock Options under the Plan. The preceding
sentence shall apply only for purposes of determining the
aggregate number of shares of Common Stock subject to Stock
Options and shall not apply for purposes of determining the
maximum number of shares of Common Stock subject to Stock
Options that any individual participant may receive."
4. In all other respects the Plan shall remain unchanged and
in full force and effect.
Dated: June 27, 2000 /S/ SUSAN M. SKROKOV
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Susan M. Skrokov, Secretary
